ESL Investments' Eddie Lampert took home $1.02 billion in 2004.

Hedge funds: a wild quarter The once-high flying funds are struggling to make money as market conditions have gotten tougher. (Full story)

NEW YORK (CNN/Money) - Everyone knows top hedge fund managers can pull down jaw-dropping sums of cash, even after a so-so year.

But a new survey shows that even rank-and-file workers at big hedge funds have the potential to earn more money than their counterparts at more traditional asset management firms or Wall Street banks.

The big bucks have trickled all the way down to the secretarial pool, according to the 2005 Hedge Fund Compensation Report from executive search firm Glocap, which places professionals at "alternative investment" firms like hedge funds, private equity funds and venture capital firms.

There's a reason many top traders leave their cushy, high-paying gigs at investment banks to hang out a shingle.

Just check out the 2004 payday for Eddie Lampert, founder of Greenwich, Conn.-based hedge fund ESL Investments, which takes big stakes in distressed companies. Lampert, who brokered Kmart's purchase of Sears Roebuck & Co., took home a whopping $1.02 billion that year, according to a survey from Institutional Investor's Alpha, an industry magazine.

Though going solo means having to worry about running a business alongside managing a portfolio, the payoff can be well worth it if the manager is good enough. Hedge funds generally charge investors a management fee of one to two percent and a performance fee of at least 20 percent. The downside is that when a fund does not make money, neither does the manager -- compensation is tied almost entirely to how the fund performs.

Equity stakes boost pay potential

A big part of earning potential at a hedge fund is not just base pay plus bonuses, however. As managers now are doing whatever it takes to record gains in a tough trading environment, hanging on to top talent is getting increasingly important. More and more, hedge fund managers are starting to share the wealth by giving equity stakes in their firm to key employees or expanding already-existing equity plans.

Hedge fund managers who have already done this include Stephen Mandel, who manages $9 billion equity hedge fund Lone Pine Capital, and Daniel Och, who manages New York-based Och Ziff Capital Management, an $11.5 billion hedge fund.

According to the Glocap survey, investment professionals besides the chief investment officer at most big hedge funds pocket base salaries in the six figures, but for employees who do not have equity in a firm, the real money comes from their bonuses. For investment professionals -- in other words, anyone making an investment decision, such as portfolio managers and analysts -- with five to nine years of experience, bonuses jumped from $212,000 in 2003 to an average of $287,000 in 2004. Traders with 10 or more years of hedge fund trading experience saw their bonuses increase 38 percent from $313,000 in 2003 to $433,000 in 2004.

Investment professionals with one to four years of experience earned an average bonus of $125,000 in 2004 and an average base of $104,000 in 2005, up from $96,000 in 2004, the survey found.

According to Glocap, the hedge fund payola even trickles down to assistants. Experienced administrative assistants who work at hedge funds pulled down $89,000. Hedge funds in the top quartile of performance among the funds surveyed paid their most experienced assistants an average of $80,000. With bonuses, the most experienced assistants can make $100,000 or more in a year, well above the industry average, according to a trade group for administrative assistants that found most administrative support professionals make between $30,000 and $50,000.

But they earn those checks – according to Glocap, these jobs are highly demanding and often require both a college degree and several years of experience as an executive assistant.